Buiter criticises Fed Board structure, Bernanke and Summers

Willem Buiter has written a really nasty post on all mentioned in the title.

He says Fed Board Structure only helps banking industry. It is a system which allows regulated to choose regulators. You have regional Fed Board supervising banks and banks in turn serve as board members and shareholders as well. This problem came to surface with NY Fed recently

Bernanke should not be reappointed as he has made Fed a moral hazard machine and turned Fed into a off balance sheet subsidiary of US Treasury

Summers should not be elected to FEd Chairmanship as he is behind much of the problems we face now.

Buiter has been a big critique of Fed in this crisis and his 2008 paper on the same set the stage for more to come (It inspired ME to write one of its most creative posts).

In this post his criticism of Fed’s board structure is quite interesting. Again, I don’t see Obama’s plan to fix this big conflict of interest problem and instead focuses on all other things. Why don’t we reform Fed Board structure? How can we still have banks as major stakeholders in regional Feds? Why isn’t this the major reform agenda for Fed? Financial oligarchy just gets bigger and bigger and is not limited to US. It is spreading its wings and weight everywhere.